Mistakes on tax returns are more common than you might think. Taxes can be tricky, and the paperwork? Well, it’s not winning any “simplified process” awards. If you’re filing taxes on your own, the chances of making a mistake can feel even higher. And that’s assuming you’re dealing with a regular year, IRS-wise.
Now, 2024 might seem like a smoother ride compared to the upheaval of the Tax Cuts and Jobs Act years ago, but things still get complex fast. If you’ve just realized you made a BIG mistake on your tax return this year, take a deep breath. It happens more often than you’d think. The good news? There are clear steps to take, and you’ve got time to sort things out.
💡 Fixing Tax Return Mistakes: Your Game Plan
All told, you have three years from the date that you originally filed your tax return (or two years from the date you paid the tax bill in question) to make any corrections necessary to fix your mistakes. If nothing about your return ultimately changes, you probably don’t have anything to worry about — in fact, there’s a good chance that the IRS will catch the mistake and fix it themselves. This is especially true in terms of math errors, or if you’ve left out an important document. The IRS will probably send you a letter letting you know what happened and what you need to do to correct it.
If fixing the mistake ultimately results in you owing more taxes, you should pay that difference as quickly as possible. Penalties and interest will keep accruing on that unpaid portion of your bill for as long as it takes for you to pay it, so it’s in your best interest to take care of this as soon as you can afford to do so.
If you’ve made a much larger mistake (like if you understated or overstated your income, for example), you’ll need to file what is called an amended tax return. This is essentially your “second chance” at getting things right, and the timetable above still applies. Understand, however, that ALL errors must be corrected in the amended return. This means that if you find three errors that will reduce your tax liability and two that actually increase it, you are legally required to correct all five. You can’t correct only the mistakes that benefit you.
An amended return can be used to correct a variety of issues, including but not limited to ones like:
- 📌 Overstating or understating your income
- 📌 Choosing the wrong filing status
- 📌 Fixing errors related to dependents
- 📌 Adjusting deductions or tax credits
If these issues apply, don’t hesitate — file that amended return and get back on track.
While an increase in your tax bill can be stressful, it’s crucial to understand that even major tax return mistakes don’t have to be a disaster. The IRS knows mistakes happen, and they’ve put processes in place to help taxpayers like you make corrections.
❓ Why a CPA Can Be Your Best Ally
This experience shows how invaluable it is to work with a financial professional when filing your taxes. Let’s be honest — your life is busy, and staying on top of every little tax law change isn’t exactly a top priority. But for a CPA, it’s the job. With their help, you can avoid future mistakes, saving you time, stress, and possibly more tax-related headaches.
Don’t let tax return mistakes keep you up at night!
At Insogna CPA, we specialize in helping taxpayers like you avoid these issues altogether. Want to make tax season smoother next year? Reach out today, and let us take care of the details so you can focus on what matters most — your life, your business, and your peace of mind.